The Reverse Fishing License Mechanism for Kiribati’s Phoenix Islands Protected Area: An Experiment in MPA Financing

This past June in Monaco at a private meeting of the Monaco Blue Initiative, President Anote Tong of the Pacific Island nation of Kiribati announced some good news. The PIPA Conservation Trust, created four years ago to finance his country’s 408,250-km² Phoenix Islands Protected Area, had just received its first donation. President Tong said Kiribati would match the donation.

PIPA is noteworthy in the MPA world. One reason is its size. In 2008 when its boundaries were expanded to their current dimensions, PIPA was considered for a time to be the largest MPA in the world (MPA News 9:8) before eventually being surpassed by the UK’s Chagos MPA.

Just as notable is the financing arrangement that underpins PIPA’s protection: a “reverse fishing license” mechanism, which may in fact be unique in the MPA world. This financing mechanism is embodied in a Conservation Contract that is under development by Kiribati, Conservation International, and the New England Aquarium. The Conservation Contract ties the gradual phase-out of commercial fishing in PIPA to the raising of funds. In other words, the more money the PIPA Conservation Trust receives in its endowment, the more of PIPA is placed off-limits to commercial fishing (MPA News 11:6).

The small but tuna-rich nation of Kiribati “relies entirely on fisheries for economic growth,” said President Tong in June. The revenue comes largely from selling fishing licenses to foreign tuna fleets. In accord with that, much of the interest earned on the PIPA endowment will go to compensate Kiribati for lost revenues suffered from restricting those fishing licenses – a component of the gradual closure of PIPA. Other revenues from the endowment will go to support the core costs of managing PIPA and the Trust, which account for roughly US $550,000 per year.

Making more of PIPA no-take

Although it is a fairly common misconception in the global MPA community that PIPA is already no-take, that is not true – at least not yet. So far 3.12% (12,714 km²) of the MPA is restricted to all fishing. This no-take zone encompasses seven of the eight atolls and islands in Kiribati’s Phoenix Islands group, and includes more than four-fifths of the identified “high priority” habitats and key species in PIPA, including shark nursery areas and seabird nesting sites.

In addition, no commercial fishing is allowed in a 2486-km² area that encompasses Kanton Island. And there is a 60-nm purse seine exclusion zone around Kanton as well, covering 37,197 km². All told, with the no-take zone and other closures, 12% of PIPA is closed to the predominant commercial fishing industry in the region.

In 2010, the PIPA Conservation Trust set an interim “Phase 2” fundraising target of US $13.5 million to be raised by the end of 2014. Reaching the $13.5-million target would trigger additional closures to commercial fishing (as well as funds for core management of PIPA and the Trust). The extent of these closures is under discussion; a goal of 25% additional no-take area has been considered (MPA News 11:6).

The increasing value of tuna licenses, and other complexities

The value of Pacific tuna has risen in recent years, thanks largely to a joint strategy by several Pacific Island nations to constrain tuna catches by foreign fleets, called the Vessel Day Scheme. (For an analysis of the strategy and its impacts so far, go to http://www.academia.edu/3340861/Rights-based_management_in_the_Western_and_Central_Pacific_Ocean_tuna_fishery_Economic_and_environmental_change_under_the_Vessel_Day_Scheme.) As a result, Kiribati’s annual revenue from fishing licenses has grown significantly. What does this have to do with PIPA? Well, the more valuable fishing licenses become, the more costly it becomes for Kiribati to restrict those licenses – which has been the mechanism foreseen for closing PIPA. This is a potential risk of the reverse fishing license mechanism, at least from the conservation side: as fishing generates more revenue, additional protection may become more expensive.

That being said, the calculation of Kiribati’s lost revenue from closure may be more complex than that. PIPA includes only about half of the EEZ around the Phoenix Islands group. Conceivably, says Sue Taei, Pacific Marine Director for Conservation International (CI), vessels displaced by additional closure of PIPA could be reallocated elsewhere in the EEZ under the Vessel Day Scheme, with no resulting reduction in fishing days.

“This would essentially be an experiment to close PIPA and to monitor if there would be no significant loss in fees,” says Taei. “Potentially, in the longer term, a premium fee could be charged for fishing in Kiribati’s wider Phoenix EEZ outside PIPA. CI thinks this is an important experience for the region: it tests the new genre of large-scale MPAs for utility as part of an ecosystem-based management approach on tuna.” [Editor’s note: Other Pacific Island nations are examining the reverse fishing license mechanism in light of their own MPA plans – see the box at the end of this article, “Palau plans to ban foreign commercial fishing in EEZ; is considering options to offset revenue loss”.]

Adding another layer of complexity: in October 2012, Environment Minister Tiarite Kwong announced Kiribati’s intent to eventually close all of the MPA to commercial fishing. This was the first time that goal was officially set for PIPA. (In his Monaco speech this past June, President Tong said full closure of PIPA was critical to help ensure a sustainable regional tuna supply, provide a natural laboratory for climate change research, and diversify Kiribati’s economy through ecotourism.) To reach the 100% no-take goal via the mechanism of the reverse fishing license, it is possible that significantly more funding – several times more – will have to be raised than has been raised so far.

At a crossroads

PIPA’s reverse fishing license mechanism is at a crossroads. While the mechanism just experienced its first fundraising success, the challenges the partners face to meet future goals for fundraising and area closure remain significant. What can be learned so far from the use of the reverse fishing license? MPA News spoke with Sue Taei of Conservation International and Teuea Toatu, Executive Director of the PIPA Conservation Trust, about their experience with the mechanism and what lessons can be drawn from it.

MPA News: What main challenges have you faced with regard to implementing the agreement, and are you on target to meet your goals?

Sue Taei: The biggest challenge, and also the biggest opportunity, has been the evolving nature of tuna fisheries management in the Pacific. CI firmly believes that large-scale MPAs have a role to play in ecosystem-based management of pelagic fisheries such as tuna. We also do not have 20+ years at hand to prove MPA utility [in the open ocean context] to naysayers, as was the experience in the realm of coastal MPAs. CI is investing in sites like PIPA on both a precautionary and scientific basis to conserve ocean and island ecosystems with the aim that this becomes a “core business approach” of managing an EEZ.

The reverse fishing license concept remains a novel and promising concept. However, it was conceived at a time when the management structure for a major component of the tuna fisheries in the region was in flux [with implementation of the Vessel Day Scheme and a resulting spike in tuna license value]. Pinning an opportunity cost to this moving target has proven a fascinating challenge in many aspects. We are working on the projections and numbers in the agreed partnership approach with Kiribati and the New England Aquarium to come to a mutually acceptable target for Phase 2 of the fishery closure.

Teuea Toatu: PIPA is on track with implementing its 2010-2014 Management Plan. The 3% of PIPA that is already fully protected covers 12,000 km² and accounts for a large share (80%) of the priority island, lagoon, coral reef, and immediate offshore habitats in the MPA. Within this prioritized program, globally important research on climate change impacts and recovery from coral bleaching, island restoration, and securing globally important seabird nesting populations have all been successful. Combined with additional fishing restrictions, PIPA is more than 12% zoned with conservation measures, covering more than 52,000 km² of islands and ocean ecosystems.

The [interim] $13.5-million target is a realistic estimate to cover the Trust operation and core management costs and to provide some resources for reverse fishing licenses that trigger additional [no-take] protection. Nothing has changed for the Trust operation and core management cost needs since that target was set in 2010. It is important to capitalize the endowment to meet its first two objectives on schedule.

MPA News: Do you expect that eventually 100% of PIPA will be closed to commercial fishing?

Sue Taei: We welcome Kiribati’s decision to eventually close all of PIPA to commercial fishing in line with President Tong’s announcement, and are confident that we can meet the financial goals for the PIPA Conservation Trust. Again, those goals as related to the reverse fishing license are under discussion as we re-evaluate the potential economic costs of full closure and implications of the Vessel Day Scheme use.

MPA News: Other Pacific Island nations have announced plans to set aside large parts of their EEZs in marine protected areas. It is possible that some of them may be interested in implementing a reverse fishing license mechanism with CI, similar to Kiribati’s. Would you be open to exploring such arrangements?

Sue Taei: Tuna fisheries licenses make up a major part of many Pacific Island nations’ economies. As a result, excluding commercial fisheries from large swaths of their EEZs could well have significant economic costs. Equally, conserving and restructuring fisheries effort in part of your EEZ is commonsense, like a savings and spending account at your bank. It is wise to keep some, wise to use some. In the longer term, CI believes tuna conservation measures, including MPAs, will be seen as commonplace and part of good management, including fostering better economic returns. CI is committed to helping societies adopt a more sustainable approach to development. As such, we welcome the opportunity to explore the options, possibly including a similar reverse fishing license approach, to achieving this goal of sustainable development.

For more information:

Sue Taei, Conservation International, Samoa. Email: staei@conservation.org

Dr. Teuea Toatu, PIPA Conservation Trust, Kiribati. Email: teueat@gmail.com

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